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FTSE 100 set for a cautious start as traders await the result of Tuesday’s tighter than expected US


6.25am: Too close to call

The FTSE 100 index looks set for a cautious start on Wednesday as traders wait with some trepidation for the results from yesterday’s tighter than expected US election, with some commentators not seeing any outcome for days, maybe weeks, as every single ballot needs to be counted.

Betting market odds, however, have flipped to favour Republican incumbent Donald Trump over Democratic candidate Joe Biden, with the big swing state of Florida called for Trump, although Biden currently leads the count on electoral college votes at 209 vs 174, with 270 votes needed to win.

Spread betting firm IG expects the blue-chip index to open around 4 points firmer at 5,790, having surged 131.80 points higher on Tuesday to close at 5,786.77.

Overnight in New York, before the polls closed, the Dow Jones Industrials Average ended nearly 555 points, or 2.1% higher at 27,480, while the broader S&P 500 index gained 1.8% and the tech-laden Nasdaq Composite added 1.9%.

US stock futures jumped late on Tuesday as Trump appeared to be doing better than expected in some key states as early results in the presidential election revealed a very tight race.

Chris Beauchamp, chief market analyst at IG, commented: “As the night grinds on Donald Trump appears to have staged a remarkable comeback, as polling across the US suggests he has had a good night. The market reaction has so far avoided the volatility of 2016, at least on the downside, with yet more gains for stock futures.

“This impressive recovery by the party viewed as pro-business has been taken in a positive vein by markets, although there is still a lot of counting to be done. So far it is a tight race, but that was already a highly likely possibility for investors, which helps to explain why we haven’t had the same topsy-turvy movements as 2016.”

Beauchamp added: “Trump’s path to victory is still the same as it was, take the southern states and then Pennsylvania, and so far that appears to be working. But there is still much counting ahead, and a Biden win is still eminently possible. In particular Arizona offers a potential turning point for the flagging Biden campaign, leaving the former vice president still very much in the race.

Asian markets were mostly higher on Wednesday as investors stuck with bets on China’s recovery and held off any major portfolio changes as early results showed the US presidential election result as too tight to call. Hong Kong’s Hang Seng index was 0.2% higher, while Japan’s Nikkei 225 index added 1.9%, albeit having been closed in the previous session.

M&S update to provide UK corporate focus

In London, a day ahead of the start of the latest coronavirus lockdown in England, the corporate spotlight will be on Marks and Spencer Group PLC (LON:MKS) which reports half-year results.

It will be the retailer’s first update since a surprise trading statement in August when M&S announced 7,000 job cuts but said food performance had been better than it had expected in May.

“Huge uncertainty” remains around M&S, said Sophie Lund-Yates, analyst at Hargreaves Lansdown in a preview, especially around profit margins as discounting in clothing and home has weighed on performance.

“The closure of physical selling space for much of the ‘full price’ season in lockdown means there’s a very real chance this has got worse. Higher margin food items like sandwiches won’t have been flying off the shelves either as many people continue to work from home, so overall the gross margin story is likely to be a downwards one.”

Sales had fallen 49.5% by August and the analyst said she suspected this trend hasn’t reversed, while significant charges will hit the bottom line to cover restructuring.

Around the Markets:

  • Pound down 0.1% to US$1.2982
  • Gold down 0.5% to US$1,899.80
  • Brent Crude Oil up 0.5% to US$40.62

6.20am: Early Markets – Asia/Australia

Stocks in the Asia-Pacific region were mostly higher on Wednesday even though the anticipated IPO of Alibaba’s affiliate Ant Group was suspended amid regulatory concerns.

Ant Group was looking to raise US$34.5 billion in what would have been the world’s biggest IPO.

Mainland Chinese stocks rose today, with the Shanghai up 0.09% while Japan’s Nikkei 225 gained 1.72%.

South Korea’s Kospi was 0.59% higher. Australian shares ended the day lower, falling by 0.07%.


Proactive Australia news:

Alkane Resources Ltd (ASX:ALK) has further enhanced the future gold potential of the Tomingley Gold Project (TGP) in Central West NSW with a 50% increase in the resource estimate of the regional Roswell deposit to 660,000 ounces.

eSense-Lab Ltd (ASX:ESE) is making considerable progress in its research and development into the anti-viral qualities of terpenes as it focuses on synergies with joint-venture partners.

Pantoro Ltd (ASX:PNR) has confirmed the presence and continuity of two additional high-grade lodes at Wagtail Underground Mine, providing strong upside for the Halls Creek gold operations in WA’s Kimberley region.

Musgrave Minerals Ltd’s (ASX:MGV) (OTCMKTS:MGVMF) (FRA:6MU) regional drilling program targeting Starlight analogues at its Cue Gold Project in the Murchison district of Western Australia, has intersected up to 3 metres at 17.3 g/t gold from 1-metre.

Marmota Ltd (ASX:MEU) has received bonanza gold grades of up to 70 g/t in drilling at the Aurora Tank Project in South Australia which has also revealed multiple high-grade extensions.

Predictive Discovery Ltd (ASX:PDI) has executed an agreement with Progress Minerals Inc, which will see ownership of its Burkina Faso property package, including the 184,000-ounce Bongou gold deposit, return to 100% from a 49% joint venture interest.

SUDA Pharmaceuticals Ltd (ASX:SUD) passed a number of key milestones during the September quarter including approval from the Therapeutics Goods Administration (TGA) for the registration of the ZolpiMist® (zolpidem tartrate) treatment for short-term insomnia in adults.

Pathfinder Resources Ltd (ASX:PF1) has started trading on the ASX today after raising $6 million via its initial public offer (IPO) of 30 million shares at 20 cents each.

Yandal Resources Ltd (ASX:YRL) has increased gold resources by 40% at Flushing Meadows deposit, which is part of the 100%-owned Ironstone Well Gold Project near Wiluna in the Yandal Greenstone Belt of Western Australia.

Force Commodities Ltd (ASX:4CE) shares are higher after the company completed the acquisition of majority stakes in two projects in a copper-rich region of Oman from AIM-listed resource development company Savannah Resources PLC (LON:SAV).

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